SPRINGDALE, Ark. -- A Springdale returns preparer was sentenced to four years in federal prison on one count each of 'making A false claim against The United States' and 'filing a false income tax return,' according to the United States Attorney for the Western District of Arkansas.
Chad Michael Davis was sentenced November 16 to 46 months in federal prison to be followed by three years of supervised release.
According to court records, during 2015 and 2016, Davis worked as tax return preparer and the owner of Lonetree Services, which Davis operated from his home in Springdale. As part of the tax scheme, Davis provided clients with draft copies of their federal and state income tax returns that Davis prepared and said he was going to file for the clients.
However, unbeknownst to the clients, Davis changed the figures on the clients’ tax returns, causing the amount of the tax refunds to increase. Davis then changed the bank account information on the clients’ tax returns, which directed the IRS and State on where to electronically send the tax refunds.
Davis removed the clients’ bank account and routing numbers, replacing them with his personal bank account and routing numbers, which fraudulently caused the client’s tax refunds to be electronically deposited into Davis’s personal account. Davis spent the client’s tax refunds on personal expenses for himself. When the clients questioned Davis about their refund, Davis falsely told them there was a foul-up with the IRS.
Davis also filed false personal federal income tax returns for himself for tax years 2012, 2013, 2014, and 2015. Davis knowingly failed to report the stolen refunds as well as the income he earned for preparing client tax returns. His personal tax returns fraudulently claimed refunds when Davis should have owed taxes to the IRS.
Davis waived indictment and pleaded guilty in June 2017. Restitution was also imposed in the amount of $112,308.